Heavily-indebted Italy fell into recession late last year when the economy contracted by 0.7% from output in the previous three-month period, the national statistics institute said today, confirming an earlier estimate.
Coming on the heels of a 0.2% drop in the third quarter, the data met the official definition for recession of two quarterly declines of output in a row. Italy has the third-biggest economy in the euro zone after those of Germany and France.
On a 12-month basis, Italian gross domestic product (GDP) slipped by 0.4% in the final three months of 2011, slightly better then an initial estimate of -0.5%, figures from the Istat institute showed.
For 2011 as a whole however, business activity gained 0.5%, Istat said, revising an earlier estimate of 0.4% growth slightly upwards. Italy is burdened by massive debt of €1.9 trillion, equivalent to 120.1% of GDP, and has drawn up several austerity plans since 2010 to reassure financial markets.
The government forecasts an economic contraction of 0.4% for 2012 as a whole, mainly owing to austerity measures that curb domestic consumption and investment.
The European Commission believes that Italian business activity will shrink by 1.3% his year however, while the International Monetary Fund has forecast a decline of 2.2%.
